Direct sellers use healthcare to knock on doors

MUMBAI: The nutrition and wellness category has largely contributed to the 15-20% growth rate clocked by the Rs 2,400-crore direct selling industry for 2003-04.

Companies such as Modicare, Himalaya Products and even HLL Network, through its Ayush range, are venturing into the healthcare segment to tap the nutrition and stress management market.

Industry majors say preventive healthcare is growing fast and thereby ensuring a rise in demand for health products although they are relatively high-priced. Nutrition & wellness (protein powder and health supplements) contributed more than 35% of the total industry turnover with homecare contributing around 25%.

HLL, the largest consumer goods company with a nationwide reach, is believed to be keen on launching products in the wellness category with the launch of a range of food and dietary supplement products under its Ayush franchise. Ayush is now already into the wellness category, on the services front, through the Ayush Therapy Centres.

Himalaya and Dabur currently dominate the wellness market apart from Amway and Herbalife, the two multinational direct selling companies who have been at the forefront of developing the nascent market in the country.

Industry sources said the high success rate of the Bangalore-based Herbalife International, that deals with health and nutritional supplements, and Amway India's Nutrilite range of products led to high interest in the category, with several companies now setting up operations in the segment.

Companies are trying to push growth further by offering products in multiple pack sizes at more convenient price-points.

A senior official in Amway India said that unlike the past where nutrition was confined to kids, consumers are demanding nutritional products for the entire family.

Amway has tied up with the Chennai-based Sai Mirra Innopharm to manufacture some of the nutrition and wellness products. Almost 85% of the products sold by Amway India are now manufactured within the country through five third-party contract manufacturers.

Modicare is marketing Well, a range of wellness products that now comprises Modicare Well High Protein Body Nourisher and Modicare Well AM-PM Energising & Stress Relieving Dietary Supplement. The former, a blend of soy and milk proteins, costs Rs 690 for 200 gm. The AM-PM, described as a combination of modern science and Ayurveda, is claimed to improve nutrition and manage stress. It is priced at Rs 1,440 for a pack of 60 capsules.

A Modicare spokesperson said the company anticipates the nutrition and wellness category will take at least 15% of the product pie.

The entry of new players such as DXN Trading, K-Link and Altos is also helping to expand the market. Products such as cleaning products and detergents have driven growth in the homecare category.

Analysts say the innovations and value offered by the direct sellers have scored over the promotions offered by the fast-moving consumer goods (FMCG) majors. However, direct sellers too had to drop prices and introduce smaller packs to drive growth rates.Direct selling majors such as Modicare, Oriflame, Avon and others focused on the mass segment and sported the affordability label to push volumes, in line with the FMCG industry.